Posted on 05/14/2018 11:28:59 AM PDT by doug from upland
An audible gasp went out in the breakout room I was in at last month’s pension eventcosponsored by The Civic Federation and the Federal Reserve Bank of Chicago. That was when a speaker from the Chicago Fed proposed levying, across the state and in addition to current property taxes, a special property assessment they estimate would be about 1% of actual property value each year for 30 years.
Evidently, that wasn’t reality shock enough. This week the Chicago Fed published that proposal formally. It’s linked linked here.
It surely ranks among the most blatantly inhumane and foolish ideas we’ve seen yet.
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Homeowners with houses worth $250,000 would pay an additional $2,500 per year in property taxes, those with homes worth $500,000 would pay an additional $5,000, and those with homes worth $1 million would pay an additional $10,000.
Is the Chicago Fed blind to human consequences? Confiscatory property tax rates have already robbed hundreds of thousands, maybe millions, of Illinois families of a their home equity — probably the lion’s share of whatever wealth they had.
Property taxes in many Illinois communities already exceed 3%, 4% and even 5% of home values.
In south Cook County they already average over 5%. Most of those communities are working class, often African-American. The Fed says maybe you could make the tax progressive by exempting lower values, but that’s very difficult to do and, if you did somehow exempt the poor and working class, the bill pushed to the others would be astronomical.
Those rates have already plunged many communities into death spirals, demanding an immediate solution, but the Chicago Fed apparently wants to pour on more of the accelerant.
Don’t they understand that nobody will build on or improve property when property taxes are that high? When taxes are 3% to 6%, that means that any value you add is subject to a perpetuity in that amount on the value of any improvements, senior to your ownership interest and your mortgage. Have they never been to our communities with countless dis-repaired abandoned homes and commercial properties, which are the result?
Get this, which is part of their reasoning: “New taxes wouldn’t affect people thinking of moving to Illinois. While they would have to pay higher property taxes, that would be offset by not having to pay as much for their new homes. In addition, current homeowners would not be able to avoid the new tax by selling their homes and moving because home prices should reflect the new tax burden quickly.”
In other words, just confiscate wealth from current owners because they will pay, whether they stay or not, through an immediate reduction in home value.
This proposed tax would only address the five state pensions. What about the other 650-plus pensions in Illinois, particularly those for overlapping jurisdictions in Chicago which are grossly underfunded? The Fed was asked that at last month’s seminar and they, without explanation, said they didn’t bother to cover that.
I’ve earlier met Rick Matoon, one of the Chicago Fed authors of the proposal. He’s a smart, likeable guy who I thought had lots of interesting information. For the life of me, however, I can’t understand how he would put his name on this proposal.
Property can’t leave so seize it. That’s the basic idea.
Where the f*ck are the people supposed to get the money from? We don’t have unlimited money, you penis inhalers. We don’t have it. Go get f*cked by a rhino.
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The only solution is to renegotiate pensions.
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You misspelled ‘eliminate’, maybe is was supposed to be ‘obliterate’.
I honestly cannot find anything that documents where PPT goes, how it is disbursed. My gripe with it is that I also had to pay PPT on top of sales tax. That seems criminal to me. The law also states that VA can tax your furniture annually, but I have yet to see that happen (yet).
With all of the taxes folks pay around here (property, personal property, sales, gas, assessment, access, etc.) I am amazed I have any left over to buy lunch.
I am reminded of the legendary bank robber who, when asked why he robbed banks, had the simple reply of; “That is where the money is!” In this case, property is non-movable and taxable, thus it is where the money is! Too late to dig up the (mostly) Dem politicos who got the votes and won the elections by mortgaging the future selling bonds to pay that day’s ‘bribe!’
Someone should file suit in Federal court alleging that Illinois' constitutional guarantee is a system of peonage and violates Article IV, Section 4 of the US Constitution guaranteeing a republican form of government.
As the Illinois SCOTUS reads it, the pension guarantee establishes public employees as noblemen entitled to feudal dues in perpetuity, regardless of any future election.
Why they prohibit firearms.
Geeez! I wonder if the commie Mexican Legislature in California will pick up on this theft!
How about making these state gods work free to pay for it?
Only thing that would make this idea better is to exempt union members homes from the tax. Yes/No/Maybe?
Then they will raise the personal income tax and other property taxes.
IL is in trouble.
Not just IL. But if you don’t own it or earn it, they can’t take it. We went Galt before it was fashionable. We used to be the butt of jokes, friends and family woukd razz us, but not any more...
Why do you hate government employees?
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If I remember correctly Illinois made the mistake of making the state pensions part of their State Constitution and every attempt in court has thus been lost when trying to adjust them in any way.
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“...made the mistake...”? It wasn’t a “mistake”. It was DELIBERATE and was intended to make Illinois government “workers” (as well as legislators) an overlord class that was untouchable financially. It legally institutionalized the idea that when hard times arrive non-governmental citizens are legally obligated to always support their governmental overlords — no matter how impoveraged the non-governmental citizens become.
I think it’s getting to the point that anything you can’t hide in your pocket is goign to get taxed to nothing.
The idea that any of these ponzi schemes can survive long term is ludicrous and despite people being “promised” a pension they are fools for thinking they could get so much for so little.
IL is in trouble.
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All except for the GOVERNMENTAL EMPLOYEE OVERLORDS.
Wasn’t sure if it was like some states where it goes to a citizen ballot vote or not.
If strictly legislature then I concur.
“Homeowners with houses worth $250,000 would pay an additional $2,500 per year in property taxes”
The “additional” is way more than my total.
I haven’t read the proposal, but I’m guessing the proposal was made in order to produce a shock. The ILL government needs to take off its blinders and understand what a mess they’ve made of the State finances.
The bright side is that if you want to be able to buy cheap real estate in Chicago, wait a few years until the taxes go up to cover the pension shortfall. When that happens, real estate will suddenly become a liability, and you’ll see a buyer’s market for a decade or two.
I like your idea.
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